DTC Sight 6 – No Playing Around

DTC’s Sight this month, the first Sight of the second half of the year, is estimated at $550 million and according to Sightholders is very similar to the previous Sight in prices and offered goods.

While there was no price hike – one dealer said the make up of boxes pushed up the prices – premiums on boxes remained high, some selling at a 12 percent premium, some at a 30 percent premium, and some boxes, it was claimed, even sold for as much as a 40 percent premium.

Sightholders report that they did not get goods beyond their ITOs (Intention To Offer – the intended allocation to each Sightholder by articles).

During the Sight, some of the Sightholders got feedback on their profile. It was given at 45 minute long meetings with DTC officials, during which each client also heard an explanation on their ITOs.

Each Sightholder was told where he stands relative to his peers on each of one of the seven elements that make up the profile (such as finances, marketing, etc.), and how much progress the Sightholder made since the last review.

On that basis, and availability, the DTC decided how much of a requested allocation was actually supplied. At the end of the day, the result of this is that the bigger Sightholders received a bigger ITO, while the smaller Sightholders received a smaller ITO.

The built in system favors the bigger Sightholders. What might this lead to? As one market observer noted, as De Beers’ supplies shrink - due to demand for direct supply for polishing in South Africa and Botswana and a possibly shrinking supply from Russia - there may possibly be no choice but to decrease the Sightholder list even further in the future.

In other news, the annual baseball game between the American Sightholders and the DTC was cancelled over heavy rains, however the dinner at the London Zoo was held as scheduled.